Baylor Univ. Contract Review: Substantive Checklist for Divisional Contracts, Lecture notes of Remedies

Download Baylor Univ. Contract Review: Substantive Checklist for Divisional Contracts and more Lecture notes Remedies in PDF only on Docsity! BAYLOR UNIVERSITY Policy and Procedure for Contract Review, Execution, and Administration Substantive Checklist for Divisional Review of Contracts No contract is valid unless it contains three essential elements: (1) the names of the "parties," (2) the "subject matter," and (3) "consideration." Each of these terms is defined below. Please review the following areas: 1. Intent of the Parties: Because the University will be required to comply strictly with the agreed terms of the contract, it is important to make sure that those terms and conditions as written clearly and accurately express the intent of both parties. It is essential that there be a "meeting of the minds." Only those who negotiated the contract and those who will be responsible for its performance can know this with certainty. As part of the review process within a division, these individuals should indicate in writing that they have reviewed the contract and believe the contact, as presently drafted, "clearly and accurately" expresses the intent of both parties. 2. Parties: The "parties" are the persons who enter into a legal arrangement. They may be living persons or "legal persons," such as a corporation. All parties to the contract must be clearly identified. Because schools and departments are not legal entities capable of entering into a contract, the University, as a party to the contract, should always be referred to as "Baylor University" and not as the specific school or department which is obtaining or providing the goods or services that are the subject matter of the contract. Example: This agreement is made on October 8, 2005, between Baylor University, One Bear Place #97371, Waco, TX 76798 and XYZ Computer Company, P. O. Box 1234, Waco, TX 76745. 3. Consideration: A contract is not valid without consideration; i.e., quid pro quo or something given for something received. The contract must explicitly state what is being exchanged between the parties as consideration, such as a specific purchase price or payment in exchange for specific goods or services. The price or payment cannot be open-ended. If Baylor will be obligated to pay the other party, it will pay only by University check or by ACH, not by cashier's check, certified check, or money order. Example: Baylor shall pay the Contractor by University check the Contract Sum of $95,468. Also, a contract should not obligate the University to pay for the goods or services within less than 30 days of the invoice date. 4. Subject Matter: The "subject matter" of a contract is the goods or services for which the parties have bargained, one party providing the goods or services in exchange for something else. The goods or services should be described in sufficient detail so that a reasonably prudent person could identify the goods or could understand the types of services that are to be performed. If purchasing goods, the quantity must be stated. Example: The Contractor shall remove and replace existing built-up roof and insulation and install new insulation and a built-up, Hyload roof. 5. Term: The "term" is the length of time over which the contract will be valid. If work will be performed, or goods purchased, over an extended period of time by Baylor or the other party, the agreement must specify that period of time. If the agreement is to last more than one year, try to negotiate for the addition of a provision allowing Baylor to terminate the contract for any reason by giving 30 days prior written notice. Example: The Work to be performed under this contract must begin on October 1, 2005, and, subject to authorized adjustments, Substantial Completion must be achieved not later than November 9, 2006. Either party may terminate this agreement by giving 30 days prior written notice of termination by registered or certified mail. 6. Indemnity, Hold Harmless, Exculpatory, and Waiver Clauses: Indemnity, hold harmless, exculpatory, and waiver clauses attempt to place or transfer liability for certain acts or omissions to one of the parties. Indemnity clauses are used to limit or transfer the possible liability of one of the parties to the agreement that may become liable to third parties arising out of the existence or performance of the agreement. The clause may indemnify against liability or loss. An exculpatory clause relieves one party to a contract from responsibility for injuries caused to the other party. If the agreement contains an indemnity, hold harmless, exculpatory, or waiver clause, or if the proposed agreement asks Baylor to waive liability or waive a warranty, or if the other party attempts to limit its liability to acts of "gross negligence" or "willful misconduct," the agreement must be forwarded to the Office of General Counsel for review. The contract should also be submitted to the Office of General Counsel if it contains a clause limiting the remedies available to Baylor in the event of a breach or if it specifies a certain remedy, i.e., liquidated damages. If you believe that Baylor should not object to such clauses under the particular circumstances of the agreement you have negotiated, please specify your reasons for this belief in your note forwarding the proposed contract to the Office of General Counsel. Example: Baylor shall indemnify and hold harmless the Contractor and its officers, agents, and employees from all suits, actions, losses, damages, claims, or liability of any character, type, or description, including -without limiting the generality of the foregoing all expenses of litigation, court costs, and attorney's fees for injury or death to any person, or injury to any property, received or sustained by any person or persons or property, arising out of, or occasioned by the acts of the Contractor or its agents or employees, in the execution of this contract. Example: XYZ Corporation, its officers, directors, employees, and agents shall not be liable for any acts or omissions in the performance of the duties and responsibilities of XYZ, except when such acts or omissions are due to XYZ's willful conduct or gross negligence.